Neufund: Equity for ALL
Which problem is Neufund trying to solve?
Neufund makes it much easier for anyone to both fundraise and invest on Blockchain. Equity Token Offerings (ETOs) are a type of Security Token Offering (STO) and thanks to our architecture they enable both on- and off-chain companies to conduct public offerings on Blockchain in an easy and fully compliant way. To make that happen we have built a unique legal-technical architecture that establishes an irrevocable link between real-world equity and its on-chain representation, in the form of a token. We have also implemented high-end AML/KYC procedures. We have solved the big challenge of ICOs — equity tokens are legally-enforceable and protect the investors and they represent a very clear asset — equity in a company.
But it’s also more than that — we also solve the problems and challenges from traditional markets. Our ETOs are much easier, cheaper and faster than traditional IPOs, making them much more accessible. Easy follow-on rounds and their programmability solves also problems known from traditional VC markets.
Why should I tokenize my company shares?
STOs are a much-needed technological evolution in the way we raise funds nowadays. There are a number of advantages of tokenized equity over paper-based assets. You can address a global pool of crypto investors who can participate in the offering from almost anywhere in the world. Programmability enables you to build in utility features, such as shareholders governance or dividend distribution. Instead of costly and time consuming VC rounds, you can easily conduct a follow-on round to release more tokens. And all this is protected by an irrevocable and fully transparent smart contract.
How expensive and time consuming is it to do an STO?
The cost and time involved in conducting an STO depends on the conditions of the offering and the issuer. Setting a private placement takes a matter of days and costs almost nothing. Conducting a public offering carries regulatory requirements, which increase the cost of such an offering, however, it remains significantly cheaper and faster than a traditional IPO and thus accessible to startups and early-stage companies.
How far are we when it comes to the trading of Security Tokens? What are the biggest problems and how/when will they be solved?
We see Blockchain as a technological evolution of existing financial markets. It replaces multiple middlemen and makes the ecosystem more transparent, and accountable. There are certainly questions that need to be answered — for example, how do we ensure investors safety? How do we align existing market players with the Blockchain? How does the regulatory framework influence trading on Blockchain and how much of it is actually needed, bearing in mind that distributed ledger technology (DLT) replaces numerous middlemen?
Can you explain to us how the transfer of Security Tokens works, both technically and legally? Is my ownership of an asset “just” stored on the blockchain or is there an “offline copy” keeping track of my transactions (change of ownership)?
Our equity tokens are protected both on- and off-chain. Our architecture creates a cryptographically hashed link between the on-chain token and legal documents that exist in the real world, so the rights of the equity token holder are protected twice. Such architecture equals the rights of token holders with company’s shareholders.
What happens if I lose the private key to my Security Token?
You are solely responsible for keeping your private key safe; we do not offer any recovery methods.
What was the best learning you made during the last year?
That the direction we chose to take in 2016 was the right one. Blockchain is a powerful technology that can potentially make financial markets more inclusive, transparent, and effective. Our ongoing is the proof-of-concept that was designed back over two years ago, so we’re very proud of reaching that milestone.
Can Security Tokens become a heater during crypto winter?
Absolutely. Our CEO, Zoe Admovicz, recently wrote on her Twitter that she is happy that “crypto winter” has arrived. We believe that security tokens are a natural evolution for Blockchain community — they represent a real-world asset instead of a future utility, and they also secure the rights of investors in real world.
Thank you for the interview.
Note: This interview was conducted on 19.12.2018